Huawei to Invest $500M in India

12:05 PM -- Huawei Technologies Co. Ltd. has confirmed plans to invest $500 million in a manufacturing unit in India, reports The Economic Times.

The move should find favor with India's telecom authorities, as it will create jobs and keep more of the operators' capex in the country. During the height of the recent security flare-up, which is now resolved, an industry insider told Light Reading Asia that the Chinese vendors were out of favor with the authorities because they weren't investing in India, "so the entire profit is going out of India." (See Huawei Boasts India Business, Huawei Addresses Security Fears, and India Clears Way for Chinese Imports.)

Fellow Chinese vendor ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) is expected to follow suit. It already has a small assembly unit at Manesar, near New Delhi, and has hinted at plans to expand that site or invest in a separate manufacturing unit. (See ZTE Embarks on Indian Charm Offensive and ZTE India Expands Tech Center.)

— Gagandeep Kaur, India Editor, Light Reading

Gabriel Brown 12/5/2012 | 4:23:07 PM
re: Huawei to Invest $500M in India

Hi Gagandeep - does this have any implications for Huawei's own supply chain? Silicon suppliers? Stack vendors, etc?

I seem to recall when Ericsson shifted manufacturing to India, all it's suppliers had to go there to. This was the only way it could meet the (at the time) challenging price points.

Perhaps the situation is not as acute in Huawei's case as it already has a low cost supply chain, but still...

Gagandeep Kaur 12/5/2012 | 4:23:05 PM
re: Huawei to Invest $500M in India

I dont think Huawei's supplier would need to move to India. This initiative is part of Huawei's localization strategy and going forward the company is likely to source more and more from the Indian suppliers. According to the recent press release, the company clocked $300 mn in procurement from local vendors and I believe, this will only increase with the coming up of Indian manufacturing unit...

Gabriel Brown 12/5/2012 | 4:23:04 PM
re: Huawei to Invest $500M in India

Thanks for the extra info. A similar thing happened in Indonesia. Huawei, ZTE and, (I think) Samsung, have had to move equipment manufacturing there to win local business. ZTE announced an LTE trial with Telkomsel today, so it is working to some degree.



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